Sega suffers 6.6% decline in revenue from year-to-year

Sega has revealed in its nine month financial report that the company suffered a 6.6% loss in its April-December 2011 period compared to its April-December 2010 earnings. The figures might have been worse if not for the company’s investment in coin-op arcade pachinko machines.

However, the business made an overall profit of ¥34.4 billion (£284.7m) for the period, with sales of ¥311.7 billion (£2.58bn), a year-to-year increase of 0.5%.

”In the home video game industry, demand was generally weak in the U.S. and European markets due to the headwinds such as sluggish personal consumption. The Group needs to adapt to a changing business environment in which the market demand for new content geared toward social networking services (SNS) and smartphones is expanding,” the report summarized.

According to Sega’s report breakdowns, ¥64.1 billion came from net sales from the consumer business arm, which includes its videogame, toy and animation departments. What might have been disturbing for Sega was the fact that during the nine month period of 2010, the department enjoyed a positive income of ¥2,811 million. This year, the department suffered a net loss of ¥5,509 million.

Sega reported that its best selling software title over the nine month period was Mario & Sonic at the London 2012 Olympic Games. The title moved 2.4 million copies on the Wii, with a Nintendo 3DS version due in February 2012.

Sega enjoyed growth in one particular area: pachinko sales and income from coin-operated arcade machines, which had recovered from supply issues and electricity shortages caused by the Japanese earthquake and the Thai floods. However, sales of machines had dropped compared with the April-December 2010 financial time period.